Integrating consumer duty culture into your systems and processes

So, the Financial Conduct Authority has made it crystal clear that it wants banks, insurers and financial services to proactively question what they offer and how they offer it, yep, you’ve heard this already right? And actually, we’re all getting pretty tired of hearing this by now. Good outcomes will always be very different due to different products and services, and the customer with their very human characteristics. However, it’s the firm’s role in relation to the products and services that really counts here. Financial Services firms are required to act in good faith towards retail customers, and if their products and services can’t be shown to deliver these outcomes, then action must be taken to improve them.

The FCA is especially focussed on those areas where financial services firms are not helping customers to meet their financial objectives or where firms’ actions, or lack of action, may lead to harm.

The FCA expects compliance to consumer duty to be an embedded-in-your-culture kind of process. It’s taking a long-term view and wants to see firms raising the bar and consistently looking to improve and deliver better outcomes for customers. Financial practices should recognise that this change requires a shift in mindset, not just compliance by a particular date. Long term compliance means more than just monitoring your annual review process or ensuring that suitability letters are written for the clients; the mindset and knowledge of the customer must shift as well. Staff at each and every level must be trained, motivated and have the responsibility to actively question how systems and processes relate to outstanding customer outcomes. New systems may not be necessary to evidencing good outcomes, but integrating data is vital. Here’s where a efficient back office system used to its maximum potential comes into play.

Using systems and processes correctly for the customers journey will be a massive undertaking for many firms. However, getting it right unlocks the real opportunity of the duty by giving firms the tools needed them to deliver good outcomes for customers en masse and in a way that can drive the business to long term profitability. So, use this newsletter as an excuse to take a quick audit of your back-office systems, and lets identify those areas that need attention. Here are just a handful of the questions you need to be asking,

• Can you easily locate a complete set of compliance documents on your financial planning software?
• Can you guarantee that each client receives their annual review within the required period?
• How confident are you that each clients’ risk profile is correctly recorded in your financial planning software?
• Does your business have a standard client file note template for recording every client contact?
• How confident are you that your client’s personal information on your financial planning software is accurate and up to date?
• Can you quickly and easily segment your clients by the service levels they require compared to their profitability?
• Do you have written procedures for every process?
• Could your business survive if you were absent for more than 3 months?
• When’s the last time you went on holiday and properly switched off?

Using a back-office system such as intelliflo office enables advisers to be ready for consumer duty by providing insights into what their clients want and how they behave.

So, what do you need to do and where do you need to start….

Weparaplan can help, we can ensure that all new clients are correctly onboarded from the fact-find, initial meeting, file notes through to issuing LOA’s. We can provide firms with a documented annual review process, executed, file noted and documented on IO. We can provide checklists, procedures and training support to your IO users.

So, in a nutshell, firms should view consumer duty in terms of an opportunity to better understand current delivery models, to monitoring capabilities and to implement steps to improve consumer outcomes. Meeting the implementation deadline of July 2023 will involve a heavy workload, but firms should remain focussed on the long-term benefits of embedding the customer at the centre of their principles. Or simply give Weparaplan a call on and get help from our experienced team. You can get in touch online or by calling 01472 728 030.